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ESPN Keeping Eye on the Ball, Not the Game Behind It

With News Corp. formally announcing the startup of its new
all-sports network, Fox Sports 1, and with NBC Sports Network and CBS Sports
Network continuing to grow their all-sports programming on cable, ESPN has a
bulls-eye on its back.

But ESPN execs are not too worried; network ad revenue dwarfs its current competitors, and media buyers believe it will take some time for Fox Sports 1 to pull any type of significant ad dollars away.

The Disney-owned "Worldwide Leader in Sports" has its own
story to tell to marketers. It was ranked first in "perceived value" in Beta
Research Corp.'s annual Cable Operator Evaluation Study for the 13th
straight year, with 95% of cable operators describing ESPN as "very important"
for subscriber retention and acquisition. And, according to comScore, ESPN
Digital Media accounted for 29% of all sports category usage across digital
platforms in January.

If ESPN execs are sweating over their newest competitor, it's
not evident when talking to Ed Erhardt, president of ESPN global customer
marketing and sales, who recently spoke about the company's newest rival, and
how ESPN ad sales are performing in first quarter. An edited transcript

How do you see the
Fox Sports 1 start-up and the increased competition from NBC Sports Network and
CBS Sports Network impacting ESPN ad sales?

We sell who we are and will continue to do so. We have a brand that's long
established, a multimedia brand with sizable audience of both men and women.
While Fox or the others focus on how they will position themselves to sell
against us with their sports networks, we consider our sales competition to be
much broader than those all-sports networks. We include the broadcast networks
in primetime, Facebook, Google and Sports
as competitors too. There are a wide variety of players who
want to go after the large piece of overall media pie that sports advertising
is. We are not an emerging brand like some of these competitors are. We are not
focusing on them. We are keeping our eye on the direction we are going in. We
are selling commercials for our programming across all screens because viewers
are watching sports on all screens. That's our ad focus.

Where do you stand
on NBA sales for regular season and the playoffs? Have lower ratings this
season compared to last season had any impact on ad sales?

Advertiser demand for NBA inventory is strong and sales have been very
active. A lot of the larger market teams are playing well and that helps viewer
interest and ad sales. In April, May and June the NBA playoffs is the highest
rated sports programming on television. Last year was an extraordinary year for
NBA telecasts. The labor stoppage created a pent-up demand among fans and
ratings reflected that with much more viewership once the delayed season
started. After the strong year last season, some ratings decline was
inevitable. But we are seeing signs of strong advertiser demand for the
playoffs, particularly in the movie studio category. We offer four exclusive
windows for studios in the playoffs, which are packages that include
commercials, integrations and other opportunities. All four of those windows in
the movie category are sold out through the playoffs and NBA finals on ABC.

The Major League
Baseball regular season has not started yet, but where do you stand on MLB ad

Our MLB regular season inventory is extremely well sold. We've had MLB on
ESPN for a very long time so there are a number of advertisers who are in every
year. We also sold a lot of MLB inventory in last year's upfront for this
season. In addition, the MLB organization also does a good job of getting their
official partners to advertise with us and the scatter market right now for
sports is active. Actually, we really don't have too much MLB inventory left to

You lost State Farm
as the official sponsor of the
MLB All-Star Game Home Run Derby, which you televise. Have you signed on a
replacement yet?

We are still talking with MLB about who the new sponsor will be and aren't
ready to make any announcement yet.

How do you see the
sports market playing out in the upfront this year?

Sports will again fare very well in the upfront. As DVR viewing of TV
programming approaches 50%, there will be a continued demand by advertisers for
live sports programming. And as the ad industry gets more comfortable buying
across multiple screens and platforms it will bode well for ESPN. Most of the
deals we are doing now with advertisers include buys across all screens where
we show our programming, including live telecasts.

ESPN Friday Night Fights returned in January for its 15th season. How are ad sales
for those telecasts?
These telecasts have been a nice little gem for us in terms of
advertising. Corona is the presenting sponsor for the telecasts on both ESPN2
and ESPN Deportes. A few years ago, boxing was a hard sell, but it has become a
good programming showcase for us on Friday nights and advertisers have come
back. We have televised some good matches with undefeated boxers in different
weight classes. More advertisers are open to advertising on boxing telecasts
and are recognizing the value of reaching out to multicultural audiences who
watch these telecasts.

telecasts can be found almost around the clock on ESPN today. How is advertiser
The addition of the midnight SportsCenter turned out to be a good new
window of revenue for us. Advertisers like SportsCenter
and for many advertisers it has become a core part of their overall buy. Our
morning show First Take on ESPN2,
which we revamped last summer has also been selling well.